Abstract

In September 2008, Maghound Enterprises, Inc., (Maghound Enterprises.) a subsidiary of Time Inc. (Time), launched a beta version of its Internet-based magazine distribution model called ‘Maghound’. Maghound allowed customers to choose titles from different publishers by paying a monthly subscription fee, with the option to switch to other titles any time. The service was not limited to Time’s publications but included competing publishers that chose to participate. The Maghound initiative was hailed by some industry analysts as a business model innovation in the magazine industry and an example of how traditional media providers were trying to reinvent their business models in response to new developments in the market. With the rising popularity of the Internet, the magazine industry was facing some serious challenges and some analysts felt that models such as Maghound could give the whole industry a boost. However, others felt that the Maghound model was flawed and that it had to overcome some serious challenges if it wanted to achieve its objective. Almost one year after its launch, sales from this channel continued to be negligible. The challenge for Dave Ventresca (Ventresca), President, Maghound Enterprises, was to achieve the objective of building Maghound up as a scalable circulation source for the whole industry.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the Maghound model and discuss and debate whether it is a business model innovation in the magazine industry.
• Study the magazine industry and understand the issues and challenges faced by companies operating in this industry.
• Discuss the pros and cons of the Maghound model.
• Explore strategies that Time could follow to refine its Maghound model and build it up as a scalable circulation source for the whole industry.

Keywords

Business Model, Business model innovation, Innovation, Online magazine distribution channel, Marketing strategy, Distribution, Publishing industry, Magazine industry, Time, Maghound, Netflix